Banks put up long term mortgage rates; BNZ also lowers 6 mth rates (Update 4)

Banks put up long term mortgage rates; BNZ also lowers 6 mth rates (Update 4)

The steep rise of longer term mortgage rates continues, with ASB raising their fixed mortgage rates for terms 3 years and greater by up to +0.60% this morning, followed by TSB, HSBC, BNZ and Westpac, the latter being the first bank to move its 2 year mortgage rate above 6% in the current cycle. (Update 4 to include BNZ moves.) BNZ was the latest bank to announce it would raise its long term mortgage rates (effective Friday), at the same time lowering its 6 month rates and bringing these in line with its 1 year rates. BNZ's Standard 3 year rate will be moved up 60 basis points to 6.59%; its Standard 4 year rate up 80 bps to 7.19%; its Standard 5 year rate up 60 bps to 7.29%; and its 7 year Global Plus rate up 79 bps to 8.09% (standard to 7.99%). At the same time, BNZ will lower its 6 month rates by 20 bps, with its 6 month Classic rate moving down to 5.49%, the lowest on the market. Its 5 year rate is currently the highest out of the banks. Westpac announced a rise in long term mortgage rates, effective on Friday, and was the first bank to raise its 2 year rate, up 36 basis points to 6.25%. Westpac will move its 3 year rate up 35 bps to 6.50%; its 4 year rate up 40 bps to 6.95%; and its 5 year rate up 50 basis points to 7.25%. HSBC has moved its Premier 5 year mortgage rate up 39 basis points to 6.99%. ASB's 4 year rate is now 7.15% (up 60 basis points) and its 5 year rate is now 7.25% (up 50 basis points). The 3 year rate remained under 7% at 6.50% (up 35 basis points). See all the rates here. ASB's mortgage rate curve (difference between 1 and 5 year rates) is now a positive 145 basis points (1 year is 5.80%). This compares to the bank average rate curve last week that was a positive 80 basis points. It is the steepest positive mortgage rate curve we have seen since we started collecting these records from July 2002. ASB cousins BankDirect and Sovereign also put up mortgage rates by the same margins. Sovereign's 5 year rate is now 5.35 7.35% and BankDirect's is 7.20%. TSB was the first bank to move after ASB, moving its 4 year rate up 55 bps to 7.15% and it 5 year rate up 40 bps to 7.25%. Other banks will no doubt follow soon as well, as wholesale rates and bond yields press on higher, fueling this trend. If other banks follow suit as expected, it has the potential to substantially change the way people think about their mortgage roll over strategies. See Bernard Hickey's latest Brother in law's guide to mortgage rates (updated March 26) here.

To have the latest rates emailed to you (which today included these latest changes), you can sign-up here >> You can follow these trends in our chart of mortgage rate movements here >>> Here is the chart of wholesale swap rates. It is updated daily.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.